Tips to Help You Save Money on Order Fulfillment
Order fulfillment is an essential part of e-commerce. It refers to the entire process that occurs between a customer placing an order and receiving their order. So, it’s important that this process is handled efficiently so that it doesn’t eat into your profit margins too much but you still keep your customers satisfied. This blog will look at some ways to cut the costs of order fulfillment, including the option of outsourcing and using business storage London.
What costs are associated with order fulfillment?
Before we cover how to cut costs on order fulfillment, we first need to understand what costs are actually involved in it. Here are some key factors commonly associated with the fulfillment process:
- Packaging materials – You may need cardboard boxes, tape, bubble wrap, etc., in order to pack your products safely before shipping them.
- Employee’s pay – If your business hires employees to perform things like order picking, then their wages will be a part of your costs. Even if you’re a sole trader, you should factor in the amount of time it takes to complete these tasks.
- Shipping costs – Then there are the costs of actually shipping the order to your customer, including the cost of postage stamps or labels.
Outsourcing fees – Some e-commerce businesses choose to outsource their order fulfillment. This process will come with its own costs, which will vary depending on the provider.
Profit margins are important, so you want to find as many ways as possible to cut your operational costs. Here are a few things to consider when saving on order fulfillment.
Buy packaging in bulk
Buying things in bulk isn’t just a good way to save on your groceries, but also in your business. Buy all of your packaging materials in bulk, like cardboard boxes, packing paper, envelopes, and tape. This is a more cost-effective way of supplying your packaging materials, helping you save in the long-run. They also store easily so they won’t take up too much space.
Get extra frugal by reusing old packaging. If someone returns an order or if you receive orders yourself, see if you can salvage the packaging and reuse it on a future order. You shouldn’t use boxes that are damaged or that have another company’s logo on them but try to recycle wherever possible to save on buying more packaging. You can also use things like a newspaper to pack products rather than buying packing paper.
Use commercial storage in the UK
Where you store your inventory for order picking is another potential overhead. If you have space in your home or business premises to store inventory, then this is a good way to save on storage. If not, then hiring a warehouse space can be expensive. A better option may be to rent business storage in the UK. This is especially a good option for any excess or seasonal stock that you won’t need for a while but doesn’t have space for.
Keep weight down
Postage costs are calculated based on weight, so you should try to keep the weight of your packages down as much as possible. Invest in some accurate package scales to keep track of this. Think about the materials you use in your packaging and if there are any lighter-weight alternatives.
Should you outsource order fulfillment?
Outsourcing your order fulfillment saves you a lot of time compared to doing it yourself and, as they say, time is money! But can outsourcing actually save your business money as well? Generally, outsourcing should save you money, but there are still lots of costs associated with it. Take a look at some of the pros and cons of outsourcing to determine if it’s the right option for you.
When you save money on everyday operations like order fulfillment, you can increase your profit margins or pass those savings onto your customers. So, follow these tips today to help you save more.